Can a logical approach be applied to an illogical market?

[jimibt]

shaun -make that 125 years then

started out modifying sequencers (passport designs midi sequencer), then graduated onto paid jobs doing vba in the late 90's, followed on into the 2000's with .net. still doing it to this day but have been sidelined into the brave new world of AI, but not as a coal face developer, more a process integrator. as part of my current remit, saw this and thought it would probably be a great fit for the fuzzy world of sports trading: https://sdtimes.com/ai/dimensional-mech ... -language/

anyway, have found for sure that my numerous .net attempts at capturing the market in my piston/bouncy castle all work to an extent, but really there is a divine variable sitting above it all that is not easily captured in traditional programming approaches. AI/ML may be the best way fwd imho...

right, talking of soldering irons, used to also take old drum machines to bits and reconfigure them by patching across circuit boards with jump wires (the hihats on the TR 606 were too clunky, so a little wire bridge to another part of the circuit board thinned them out nicely!!) - wild experimentation over risk is the name of the game!!

[PeterLe]

I have about 16 years experience in computing as well, along with 8 years sports trading. I was lucky enough to be profitable almost right from the start though.....

Nice post James, some jewels in there

[spreadbetting]

Maybe too many

[Euler]

I started out as a Z80 /6502 coder. The first thing I ever did was model football matches while I was a teenager. I used this to collect a ton of dividends on the football pools.

I've always found that modelling a market is the best way to go if you can describe something then you can anticipate it.

[mhorro]

Many thanks for your comments, this is just my view and I am probably wrong.

But I will be returning to gambling as I cannot make the transition.

Thanks,

Mark

[firlandsfarm]

I think your problem Mark, is the way you relate the two. When I started programming in IBM COBOL (for financial and insurance firms) I didn't try to apply my experience in horse racing to the financial programs I was writing because it was irrelevant.

Derek27, the references to how long some have been coding and your quote reminds me of a quote I picked up from my boss at the time. I was interviewing someone for a job who had 20 eaperience in the field but I felt something wasn't right but couldn't pin it down (gut feel as they say) so I asked him to attend. He asked just one question ... "tell me, do you have 20 years experience or 1 year's experience 20 times?" and that was it ... the guy had only done one aspect of the industry for 20 years!

[Derek27]

Going off subject here, but top of the list in a US survey of the worst questions ever asked at an interview, I think either by interviewer or interviewee, was, "how many young women work here?".

[slipperytoad]

PDP 11/45, Perkin Elemer, 6800/8080 microprocessors, software engineer for AT&T and HP etc, etc for 30+ years, I could go on about my career in computing but like yourself, I tried the logical approch to match my logical brain when I first started trading and fell flat on my face.

It didn't make sense, the market didn't do what I thought it should do.. I soon recognised after a while of bashing my head against a brick wall that I was the problem, not the market

Then things started improving when I changed my perception of trading based on the following guidelines I read a while ago

1. The first part of learning to trade is identifying your edge and working out your numbers and figuring out what the odds are. What the probabilities are. There is only one source of making money in markets, and that is identifying recurring patterns in market behavior and exploiting those in a manner that provides solid reward relative to risk. You marshal and attenuate various personality traits to identify and exploit those patterns. Success comes, not from indulging your personality, but from knowing which traits to draw upon and which to work around. That is called wisdom.

2. The second part of leaning to trade is teaching yourself and learning how to manage yourself so that you execute your trading system.

That’s really trading. That’s really what it’s all about. Finding an edge, defining the edge and then executing it and working on yourself so that you can continue to execute it.

[Derek27]

The first part of learning to trade is identifying your edge and working out your numbers and figuring out what the odds are. What the probabilities are. There is only one source of making money in markets, and that is identifying recurring patterns in market behavior and exploiting those in a manner that provides solid reward relative to risk.

Hi slipperytoad, welcome to the forum.

I have to disagree with the above quote that you read. It may be possible to make money by identifying recurring patterns in market behaviour but I can assure you that that would be one of a million ways to make money out of markets. There are probably as many different ways as there are successful traders.

[wearthefoxhat]

@OP

I don't seem to find horse racing illogical, not because I've found a holy grail that makes logic of everything that can happen before and during a race. If you take illogical as: lacking sense or clear, sound reasoning, I would say horse racing trading is the opposite of that. In many cases, the best fit is learning from something that's just happened and why, so it can be utilised for next time. (sounds a bit like AI learning from AI).

I have no computer science background, however my youngest son is planning university in September and he'll be taking a degree in CSc with a year's paid work in the 4th year. I'll try and steer him in the trading direction, who knows where it may lead....

[Derek27]

...my youngest son is planning university in September and he'll be taking a degree in CSc with a year's paid work in the 4th year. I'll try and steer him in the trading direction, who knows where it may lead....

Gambling addition and destitution?

If he has any sense he'll do what appeals and is best suited to him.

[Wolf1877]

25 years IBM mainframe analyst/programmer from age 18
8 years linux/apache/mysql/php
3 years MS SQL Server/Visual Studio/Integration Services with a little bit of C#

7 months into trading mainly spent building lots of data extraction/collation tools alongside manual trading.
I now have tons of data but I have definitely suffered from too much from paralysis by over analysis.
After all that number crunching I do at least now have a very clear idea of where I can build a profitable automation strategy.

[wearthefoxhat]

...my youngest son is planning university in September and he'll be taking a degree in CSc with a year's paid work in the 4th year. I'll try and steer him in the trading direction, who knows where it may lead....

Gambling addition and destitution?

If he has any sense he'll do what appeals and is best suited to him.

Quite right.

He's more interested in gaming development, coding...etc. (although he knock a spready together for me to help with the automation side of things)

[Euler]

This is actually an interesting thread and a sort of coders anonymous.

I see that you can model an activity then profit from it by: -

Finding errors in the model versus the market.
Anticipating something that is going to happen.
Benefiting from the underlying market activity.
Exploiting a technical or information advantage.

I may think of others, but that's what popped into my head. I've often found the market to be completely illogical As Buffett said but is misquoted here, short term the market is a voting machine, long-term a weighing machine. I think that applies in sports also.

[mhorro]

Thanks for all the comments it is much appreciated.

I think Bet Angel is a great product and I have been using it since 2007 and it has certainly evolved in the right direction.

What would be great is some sort of API's that allow for further extraction of data from the markets in standard format to be used for easy load into a database for modelling ( not excel ). I feel that there is a layer missing here as signals are ok i.e. provide some direction but prices/time would be great. The data is not easily aggregated and modelled. Plus it would be great to play back markets ( without video ) so you could replay and fast forward events historically using the Bet Angel product.

With respect to the computing industry in the UK I have steered my 2 children away from this. In the 1980's after graduating with a computer science degree my first job I earned £14K per year! Now Graduates are being paid £20K for the first job in the 2018!
So After 30+ years this cannot be right. I feel so sorry for graduates nowadays as I see the troubles my two children are having. Students loans etc.

I think this is happening in every industry, people working for less and more hours!

Thank god I retired at 50 years old.